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Wednesday Jun 12, 2019   
While nuclear subsidies continue to make headlines, power markets across the Northeast are still seeing retirements of nuclear generators. The latest in the string of retirements is the retirement at the Pilgrim nuclear facility that dropped off the grid with the commencement of June. This facility helped provide power to New England. Similar to the other retirements, the generating station only had one unit causing it to become uneconomic without the ability to combine overhead like some of the other multi-unit facilities. However, the recently lost capacity is expected to be replaced by the Bridgeport Station combined cycle (485 MWs) expected to come online this month. Figure 1 | Pilgrim Nuclear Station Taking a look at the real time fuel mix, we can see that Pilgrim began to ramp off ... » read more
Tuesday Jun 11, 2019   
There has been a radical change in the Lower 48 natural gas balancing since the beginning of the injection season. The EIA storage inventory has moved from a 228 BCF deficit to now a 182 BCF surplus and we are not even half way through the injection season. That flip in storage inventory has taken all fear out of the ability to fill the natural gas storage complex prior to the start of next winter. As a result the Q1 2020 NYMEX futures have drifted down from $3.04 at the beginning of April to now a settle of $2.74. The bearish benchmark NYMEX action has sent ripples throughout the country with fixed price basis following suit. There is one area that is not enjoying the price slide. Following record cold, a boost in native gas demand and ongoing system maintenance Alberta continues to ... » read more
Monday Jun 10, 2019   
Mother Nature has full control on how the energy markets play out as she can turn up the heat in the summer as well as blow arctic air down from the North to create what has been labeled as a 'Polar Vortex'.  She can also flip things around and deliver below normal temperatures in the summer and above normal levels in the winter session.  On top of if all, Mother Nature brings precipitation to regions in form of rainfall and/or snowpack.  Not a day goes by without talking about the impact weather is having on the grid, so recent times are no different.  In this week's Newsletter Article titled 'Champion of the Energy Sector', we took a look at how the weather pattern as of late has impacted the overall natural gas grid. In the article, we dove into the detail ... » read more
Friday Jun 7, 2019   
Energy markets are full of duplicative or confusing names, or at least in the west they are. For example, the transmission line connecting the Pacific Northwest to Northern California is called variously: Paci, the AC intertie, Path 65, COI, Malin500, among other names. While all of these names refer to the same general set of wires, the precise way those wires are being considered varies based on the different names, sometimes in significant ways. This issue doesn’t just apply to transmission lines from the Northwest to California. Palo Verde is another example of the issue. Palo Verde could refer to a 3.5 GW nuclear plant in Arizona, a transmission line running from the aforementioned plant to Southern California, a pricing node within the CAISO model, or a bilateral trading hub ... » read more
Thursday Jun 6, 2019   
The state of Ohio is now considering adding legislation that will subsidize the nuclear fleet which would go into effect in 2021. Four nuclear subsidies are already in place in Illinois, Connecticut, New York, and New Jersey with a fifth currently being considered in Pennsylvania. These subsidies generally create a price collar for the nuclear fleet keeping the facilities at their economic break even after all is said and done. However, the Ohio legislation, known as HB 6, is slightly different with the ratepayer fee poised to replace existing charges for renewable generation and peak demand reduction. Figure 1 | Davis-Besse Nuclear Generator The bill would add at least $1 to ratepayer’s monthly charges and grow depending on the customer’s classification. It would also ... » read more
Wednesday Jun 5, 2019   
Cameron LNG announced their first commissioning project one week ago with sendouts at the facility moving up from zero to .5 BCF per day. the site even got a visit from President Trump. The liquefaction demand did not last long. Prior to the start of June the facility has dropped its activity back to zero which took total LNG liquefaction back from 5.5 to 5 BCF. This drop off in demand had a big impact on the cash prices in the Houston Shipchannel. Since the beginning of April the HSC cash prices have fallen from $2.75 to $2.35.  Figure 1 | LNG Sendouts for May 28 - June 4 While this was a big announcement for the start up of the facility, Cameron also had some disappointing news. The second and third trains, which were expected to start up at the end of this year have now been ... » read more
Tuesday Jun 4, 2019   
It is coming up to almost nine months to the day that the Enbridge Pipeline explosion occurred up in British Columbia.  On that nice fall day back in October 2018, the market was humming along when all of a sudden a big ball of fire rose up from the ground and the natural gas grid popped into emergency mode as the 36 inch pipe that connected the British Columbia production to the Pacific Northwest via the Sumas compressor. In fact, this is the point that Spectra BC /Westcoast Pipeline hands over the keys to Northwest Pipeline.  It is the artery that feeds the demand down through Seattle/Tacoma area, heads down I-5 and touches several power plants along the way and eventually has a look at Jackson Prairie storage of heads out to California and/or back to the Rockies via the ... » read more
Monday Jun 3, 2019   
Heading into last summer, ERCOT's implied heat rates were beyond levels needed for every natural gas to be running as the grid was exposed to the coal retirements seen to start the year (January 2018).  As it turned out, all hands were on deck as the grid was able to keep the lights on without really feeling too frantic most of the summer.  When you look back on it, Mother Nature was in a good mood when it came to how much wind she would have hitting the grid during the month of August. Figure 1 | ERCOT's Monthly Wind Breakdown If you look at the chart above, the top pane represents the calculated capacity factor for all the wind that showed up in ERCOT by month since 2016.  The bottom pane illustrates the two components of the capacity fact, the first being the ... » read more
Friday May 31, 2019   
State legislators in the Western United States have been busy in recent months. The following legislation has passed in 2019[1]: SB 358 – Nevada RPS: Current RPS set at 25%. Increases RPS to 50% by 2030. Requires 100% carbon free by 2050. (Signed into law on Earth Day) SB 489 – New Mexico Energy Transition Act: Renewable requirement equals 50% by 2030, 80% by 2040, and 100% by 2045. (Signed into law on March 22nd) HB 1261 – Colorado Carbon Emissions Reductions: Targets GHG reductions below 2005 levels of 26% by 2025, 50% by 2030, and 90% by 2050. (Signed into law on May 30th) SB 5116 – Washington 100% Clean: No coal in rates by 2025, 80% carbon free + 20% WECC RECs by 2030, and 100% carbon free by 2045. (Signed into law on May 7th) HB 2020 – Oregon Cap and ... » read more
Thursday May 30, 2019   
There has been a lot of buzz recently over the series finale of Game of Thrones. As perhaps the most popular fantasy TV show came to a close, winter also slid into the background. It is no coincidence that with the end of the show, summer is just now making its way onto the board with less than a month to go before the seasons officially change. However, we have already seen heat flare up throughout the Northeast with cold temperatures making their way out of the region. Figure 1 | Summer is Coming Taking a look at the temperatures in Washington DC, highs actually reached up into the 90s over the long weekend. This caused demand to look more like a weekday despite the off peak lull. Both the South and the West throughout the PJM footprint also saw high temperatures driving demand past ... » read more
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